Hard News: A week being a long time in politics
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With our nation's future economic prospects becoming increasingly digital, selling off our energy system is pure vandalism. I guess we'll see shortly if a few weeks of opposition to that plan carries the day.
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Oh, come now, what could possibly go wrong with changing from a business model that's supposed to benefit citizens, to a business model that's entirely profit driven?
ScottishPower, which has more than 5 million British customers, saw profits rise by 7.9% last year amid fears that many people could not afford to heat their homes during the bitter winter.
Oh...
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merc,
John Key compares selling power company shares to selling TradeMe shares, yes John /Jedi mind trick on self/, these are the same shares you're talking about.
BTW, if they sell all the power companies people are just going to keep lining up to buy their shares, yes they are #itshowitworkstofail
A 10% cap on share holding, why these shares are going to be so hot you could warm your tea with them.
Apparently Key is also going to sell shares in wastewater management, oh wait. -
Sacha, in reply to
these are the same shares you're talking about
One of the economic commentators (Rod Oram?) pointed out some time ago that the TradeMe float would actually be competing for the same local investors, thus depressing the value of the SOE shares.
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merc,
Energy shares are what got the world, especially NZ in this mess in the first place. 1973, the so called oil crises, that has been proven to not have been. Prior to that energy stocks were not traded as a commodity.
http://en.wikipedia.org/wiki/1973_oil_crisis
I remember the storylines in NZ as we reeled from being bounced out of the EEC as well. http://www.teara.govt.nz/en/overseas-trade-policy/4 see Luxembourg AgreementShares are divided up in categories, our energy shares will be very valuable because we generate using hydro. The whole thing is so complex I am in awe how John has simplified it, stunned awe.
Later,
The projected sales proceeds would barely cover one year's capital expenditure by the Government.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10767976 -
Sacha, in reply to
I am in awe how John has simplified it
Joyce is a very good campaign manager. If only Labour had taken that more seriously for the last few years. Hoping they can pull something off this week, but polls still suggest that's unlikely.
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merc, in reply to
Very true because a decent memory would serve to highlight the debacle that is AirNZ. Even I can tell you that it is anti-competitive, needs to periodically fork out large sums of cash for new planes, AKL council have large shareholdings and in the airport so shun any thoughts of a second airport (Whenuapai), also Helen ran very close to accidental insider trading on the 850m bailout (Govts don't do shares so well, too ethical), also Govt owns all the lines (destinations), no other airline can effectively compete, so it's like Telecom was, a dead sitter for certain people to have shares in a Govt. guaranteed monopoly...if our sharemarket was a real one, it would have been in court years ago, it is not a real one and it has very low (cowboy low) levels of regulation.
Short story, Key is telling a very short story round a very Tolstoy length novel. We should be looking at how we even let these guys have this sort of discretionary power. Interesting Fay is back in the news too ay? -
Russell Brown, in reply to
so it’s like Telecom was, a dead sitter for certain people to have shares in a Govt. guaranteed monopoly…
I still think selling Telecom was the correct thing to do. Telecommunications needed a market.
The problem was National being played for complete and utter rubes by the people who did it. They allowed themselves to be convinced that a promise to be really nice and not abuse Telecom's overwhelming dominance precluded the need for regulation.
Nek minnit ...
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When Key talked to Radio NZ's Kathryn Ryan (34 mins, listening options), he discussed the energy SOEs as "underperforming" economic investments rather than as strategic infrastructure.
They're all regarded by analysts as well-managed so there won't actually be any improvement through private ownership. Except to the wealth of those who can afford shares.
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Sacha, in reply to
complete and utter rubes
Good description of haplessly hands-off Maurice Williamson.
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Bart Janssen, in reply to
I still think selling Telecom was the correct thing to do. Telecommunications needed a market.
The problem was National being played for complete and utter rubes by the people who did it. They allowed themselves to be convinced that a promise to be really nice and not abuse Telecom’s overwhelming dominance precluded the need for regulation.
This is something we do again and again in New Zealand. We repeat mistakes made elsewhere. There is nothing new about telecommunications companies needing regulation. The US experience alone should have been enough to inform anyone with a brain that left unregulated the company would act to maximise profit to the harm of NZ.
Can we please stop making the same mistakes that have been made elsewhere?
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merc, in reply to
I don't disagree, I am always careful with my wording, especially round Telecom whom I enjoyed a very good business relationship with. It was however an incredibly badly handled float and subsequent investment in infrastructure avoided while they played in the fields of the lord regarding investing in other areas (Telstra)...also culminating in their then departing CEO stating on record,
Yes we used deception to market our products.
Our SOE's are performing well according to Treasury, if Mr Key wants to ignore the (very expensive) advice of Treasury and simply wing it and gamble...I say we need laws to stop this radical shifting of successive Govt's policy (as noted in the child poverty doco last night).
We have way too much swinging from our Govt. I think the reason the worm loved Goff the other night was because he was finally mentioning the people, or as one commenter to the Herald put it, a society is not just about the economy, the economy is a facet of our society, but it must work for the totality of the people.
I cannot for the life of me understand how so self evident a message is so easily subverted.
We need the power stations to keep our most vulnerable warm, simple. -
Martin Lindberg, in reply to
We need the power stations to keep our most vulnerable warm, simple.
Not that I'm defending asset sales, but I don't think they are planning on actually shipping the power stations overseas.
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Sacha, in reply to
Can we please stop making the same mistakes that have been made elsewhere?
you and your fancy evidence-based policy
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And while John & Phil bicker over asset sales, our would-be Sam Morgans typically have to beg for overseas capital because local investors won’t back them, with 1987 still fresh on their minds – again, Baker vs Straker is a case in point. And nothing replaced DFC after its fatally ill-conceived foray into property speculation. Those are the real reasons why the local sharemarket is flat, not state ownership of critical infrastructure.
This is something we do again and again in New Zealand. We repeat mistakes made elsewhere.
Such malaise surrounding privatisation and infrastructure can be traced back to one common thread – cargo cultism. In this case, the cargo cult just happens to be a cross between (Berlin) Wall Street and Fountain Lakes. David Harris - of Pegasus Mail fame - was right.
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Russell Brown, in reply to
I don’t disagree, I am always careful with my wording, especially round Telecom whom I enjoyed a very good business relationship with. It was however an incredibly badly handled float and subsequent investment in infrastructure avoided while they played in the fields of the lord regarding investing in other areas
Oh I know, I know.
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Kumara Republic, in reply to
Not that I’m defending asset sales, but I don’t think they are planning on actually shipping the power stations overseas.
It would be rather difficult to do so. But they can still gather dust, as happened with Telecom when Ameritech & Bell Atlantic owned it.
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merc, in reply to
Martin the price of power will go up a lot, of that fact I have no doubt. Oh and to scaremonger, the supply is sketchy at present (outages) I don't foresee that changing with private owners needing healthy profits before healthy lines.
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Martin Lindberg, in reply to
But they can still gather dust
so long as it's not coal dust...
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Sacha, in reply to
the real reasons why the local sharemarket is flat
it's the opposite of ambitious that local investors need corporate welfare to provide a safe investment, but proper market governance is not something any politician is offering.
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merc, in reply to
Good point, what will be the incentives for power company owners to diversify, invest in alternate power. This is where the competitive, leave it to the market ideology fails, because you know, profit doesn't need to invent it own demise.
Govt. must take the lead in incentivising innovation, specifically energy generation, hell we all do. The share market model is also broken, just saying.
Sacha you are right, governance is the need, not being players. Radically I don't like the tax system we have that rewards depreciating assets, just one of my things. -
Kumara Republic, in reply to
it’s the opposite of ambitious that local investors need corporate welfare to provide a safe investment, but proper market governance is not something any politician is offering.
In other words, cargo cultism as I mentioned above.
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Now with the just -made-up-this-hour policy from Key that they will limit overseas shareholders to 10%, I have to ask. What is the point of flogging them off?
It must be purely ideological. -
merc, in reply to
Cargo cultism in part yes, but the fact remains successive Govts chop and change their policy focus like the wind and I would like to see us having more ability to keep them steady. The political switch and bait show is way too costly both economically and socially for our leaders to constantly play at...making it new!
Hamish, I have darker thoughts. -
Now with the just -made-up-this-hour policy from Key that they will limit overseas shareholders to 10%, I have to ask. What is the point of flogging them off?
It must be purely ideological.
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